No ‘silver bullet’ to fixing advice: Taylor

Speaking at a dinner hosted by the Association of Independently Owned Financial Professionals (AIOFP) in Melbourne on Wednesday night, shadow treasurer Angus Taylor underscored the importance of financial services on the broader economy, saying that currently “the settings are wrong”.

“The key indicator for me is really simple. What we're seeing now across Australia is Australians are increasingly underinsured, under banked and under advised,” Taylor said.

Addressing these concerns across financial services, he said that while the royal commission resulted in “many very worthy recommendations”, the impact has also gone too far.

“I think we've got to a point that there's been an overreach in regulation, and that's why we were the first to say we need to change the way we think about regulating this industry,” the shadow treasurer said.

He added: “We are we are increasingly under advised … we have around half the number of advisers we had about a decade ago and there is no question whatsoever that Australians are not getting the advice they need.

“I strongly supported Josh Frydenberg in his role of putting the Quality of Advice Review in place to start at how we can pull back some of the overreach that we had seen. I think that was a recognition that there had been overreach and that it was starting to have consequences.”

Taylor also affirmed the Coalition’s longstanding support for implementing the QAR’s recommendations in full, however speaking with ifa, he acknowledged this is “not the whole answer”.

“It's an important part of the journey, and we should have been getting on with it as quickly as possible. It's taken too long,” he told ifa.

“That's not to say that every recommendation in the QAR is perfect, or that it's the full answer. There will be other things we'll need to do, and life insurance is one where I'm acutely conscious of the fact that the industry is in decline, and yet it should be an industry that’s healthy.”

Indeed, he noted that there are a range of issues that were not dealt with through the QAR that need to be addressed to get advice “back on its feet again”.

Unfortunately, there is no “silver bullet”.

“I think getting rid of unnecessary regulation and compliance is important. The QAR went some way towards that,” Taylor added.

“I do think making sure that anyone who is well qualified to be an adviser should have a pathway to get there is incredibly important. We have made it difficult. There's no question about that.

“But I also think we've made it difficult to use good technology tools. I think human plus technology is incredibly powerful, and this is a sector that's made for that, and yet we've made that very difficult. So, there's a range of different levers, and we need to keep pushing.”

The shadow treasurer also criticised the government’s slow progress on implementing advice reform, saying the opposition has been “unhappy with the pace at which this has moved”.

“We have felt that it's moved in a way which has been driven by the interests of those closest to the Labor Party and the whilst the industry super funds, for instance, play a very important role in our economy, they shouldn't be setting the agenda for the economy,” Taylor added.

“They should be part of that. And it's really crucial we have an independent advisory sector that is playing a really central role in our economy for many years to come. So, the Quality of Advice Review we saw as important. We don't think though that that's the end of it. We think there is much more work to be done.”